Introduction

The Prosperity Initiatives Feasibility Study

In his inauguration speech, Commissioner Jean Monestime, Chairman of the Miami-Dade Board of County Commissioners, introduced his vision for The Chairman’s Council for Prosperity Initiatives an effort to develop new approaches to improving economic opportunity, reducing income inequality, building wealth, business development and home ownership opportunities to “broaden the County’s base of prosperity.” Joined by County Commissioners Daniella Levine Cava and Barbara Jordan, The Chairman’s Council for Prosperity Initiatives (Prosperity Initiative) was launched in response to a single central question:

Miami-Dade County’s economy has grown into an international center of trade, finance, design, architecture and culture, and is the U.S.’s most important gateway to South America. The County has been a destination for families from the U.S. and abroad seeking opportunity and for many, the County became a home in which the American dream became reality. Broad based economic opportunity and prosperity have historically been hallmarks of the County’s economy, but is that still the case today?

The Initiative seeks to develop new solutions and provide a clearinghouse for ideas addressing pressing community and economic development issues across the County. As such, Miami-Dade County engaged the Florida International University Metropolitan Center to conduct the Prosperity Initiatives Feasibility Study to provide detailed analysis of the following issues:

! Understand the scale, scope, and root causes of income inequality and the limits to economic opportunity in Miami-Dade County;

! Clearly identify the specific barriers and new challenges to economic opportunity, mobility, and equity, who is impacted, and the impacts that barriers to opportunity pose for the broader County economy;

! Identify the costs of inaction, and alternatively, what opportunities could be gained, and the broader economic impacts of improving economic opportunity and mobility, even with small successes; and

! Evaluate, identify and compare policy and programs that can be immediately implemented in Miami-Dade County to expand prosperity, address the underlying conditions creating the County’s Prosperity Gap, and delineate their program costs, effectiveness and expected local impact.

Using local and national case studies, this Study details the effectiveness, costs and organizational requirements of implementing five potential programs, comprising a Prosperity Initiatives Action Agenda. They include: 1) social enterprise incubators and accelerators; 2) supporting permanent affordability in housing through the creation of community land trusts; 3) creating community benefits agreements with developers of large scale capital projects and local community coalitions to insure community benefits; 4) the creation of children’s savings accounts programs; and 5) supporting employee owned business cooperatives.

Why Prosperity Matters

The concept of prosperity is both personal and elusive. For individuals and families, it can be attaining a desired standard of living, wealth, or financial security. From a public policy perspective, strong regional economies provide multiple pathways to prosperity, and are distinguished by four broad characteristics:

! Stable Long Term Growth: job and employment growth that is less susceptible to wide and/or rapid declines, so that household wealth and income is protected during national economic downturns;

! Economic Opportunity : The region creates a variety of jobs and occupations paying competitive wages and incomes that increase rapidly with improved skills and experience;

! Economic Mobility: The ideal that regardless of where one starts on the economic ladder, through hard work, education, and perseverance, a family can improve its economic conditions and build wealth for successive generations; and

! Equity: A prosperous local economy has widespread growth whose benefits are shared by residents across the income spectrum.

Defined this way, prosperity is an important component of metropolitan economic performance for the following reasons:

! Regions that deliver economic opportunity, mobility, and equity inevitably outperform, and ride out economic downturns better than those that don’t;

! Human capital, or the collective knowledge and skills of a regional labor force, is a distinguishing feature of high performing economies. Prosperous local economies leverage the quality of their labor force, which drives innovation and new businesses creation. Failing to deliver the benefits of economic growth more broadly across the income spectrum, in purely economic terms, is wasting considerable local talent and human capital potential;

! Limited prosperity conditions can become structural and persistent, trapping neighborhoods in decades-long cycles of high poverty, unemployment and crime. Living in communities with histories of persistent economic distress can be damaging to those who live in them, create otherwise unnecessary additional public costs, negatively impact surrounding communities, and create a drag on the broader regional economy;

! While households at the lower end of the County’s income ladder have borne the brunt of declining prosperity, it is now clear that across the U.S., declining prosperity impacts households across the income spectrum. In Miami-Dade County, rising barriers to prosperity pose issues for both households at the bottom of the income ladder, and increasingly, threaten to unravel many of the gains the County has made in higher income, higher skill economic segments, including its emerging tech sectors; and

! Improving regional economic prosperity has important national ramifications. The U.S. economy is the aggregation of its individual metropolitan economies, and according to the Brookings Institution, the nation’s 100 largest metropolitan areas account for twothirds of U.S. population, three-fourths of jobs and four fifths of economic output. They produce 72% of international service exports, 92% of patents and house 74% of the nation’s college educated population. The nation’s largest metropolitan areas play an outsized role in generating the nation’s economic output, driving its productivity growth sustaining and improving the competiveness and productivity of metropolitan economies is key to driving the nation’s economic progress.

Miami-Dade County’s One Community One Goal Strategic Plan (OCOG) Competitive Assessment addressed the strengths and opportunities that together create an environment in Miami-Dade unlike any other in the world, but also pointed out the challenges that must be addressed for the County to reach its full potential. The report, written during in 2012, noted that while drops in housing prices at that time had made Miami-Dade County more affordable during the recession, “low wages in support industries relative to housing costs continue to be an ongoing problem for the County. Job losses and population growth continue to make home ownership difficult, and poverty levels, which measure the percentage of households below a threshold have increased in the County during the recession after dropping in the early 2000s.”

The OCOG Competitive Assessment also found related weaknesses and threats to the larger economy. Specifically, the report found talent retention as a weakness in Miami-Dade County: “while Miami-Dade County ranks highly among national benchmarks in terms of the concentration of college students and graduates relative to its population, its young professional (25 -44 year-old) population is declining in numbers and has lower educational attainment than benchmark communities.” The Assessment concluded that “Miami-Dade County seems to be educating workers for other communities.”

Changing the Conversation: Beyond Poverty

The Prosperity Initiatives Feasibility Study addresses the vision and goals of Miami-Dade County’s prosperity agenda and builds on the specific economic concerns raised in the One Community One Goal Strategic Plan by providing rigorous analysis that policymakers and community leaders will need to understand the County’s economic structure, performance, and the merits of specific wealth-building strategies to address persistent economic disparities and improve regional competitiveness. Yet, to do so will require changing the terms of the conversation regarding poverty, income, and economic opportunity in two ways.

From cushion to launch pad: While traditional aspects of anti-poverty and welfare programs provide important cushions to keep many families economically afloat, the Prosperity Initiatives Study focuses on developing programs that increase economic opportunity, economic self-sufficiency and economic mobility to insure that motivated individuals and households have sufficient opportunity and capacity to grow income and family wealth through new employment and improved wages, thereby moving up the regional income ladder. Similar to the concept of Community Development, the Prosperity Initiatives Study focuses on programs of Prosperity Development

Second, the rationale for assisting families and households at the bottom of the income ladder have traditionally been rooted in a moral approach – that expanding opportunity and upward mobility for those with the most challenging economic circumstances was the right thing to do. Yet, a morally centered approach has become politically charged to the point of dysfunction. The Prosperity Initiatives Study seeks to join the growing number of national policy makers and researchers providing conclusive evidence that effective and aggressive prosperity development programs can be outstanding economic investments in the local economy and provide benefits across the income and occupation spectrum.